Australia agrees new mining tax deal

The Australian government has come to an agreement with mining companies over its controversial 'super profits tax' plan.

Kevin Rudd, the former prime minister, had revealed that his administration intended to introduce a 40 per cent tax on miners' profits.

All smiles: Julia Gillard has calmed the waters over plans for taxes on miners

However, his successor, Julia Gillard, has negotiated a compromise agreement with a profits-based minerals resource rent tax of 30 per cent that will
affect about 320 companies, rather than the 2,500 that fell under the
original tax proposal.

It will come into force in 2012.

Mining companies had campaigned against the proposed tax and the fallout was a factor in Rudd's fall from grace.

Gillard 's decision effectively removes the issue from the
political agenda and clears the way for national elections in the country.

Gillard said: 'The breakthrough agreement keeps faith with our central goal from day one: to deliver a better return for the Australian people for the resources they own and which can only be dug up once.

'It is the result of intense consultation and negotiation with the resources industry.'

In a joint statement, mining companies BHP Billiton, Rio Tinto and Xstrata welcomed the new scheme.

BHP Billiton CEO Marius Kloppers said: 'BHP Billiton believes that tax reform that is prospective, competitive, differentiated and resource-based will ensure that the Australian mining sector continues to grow through investment in the industry which benefits all Australians.

'We are encouraged that the design is closer to our frequently stated principles of sound tax reform.'